What is a Margin Calculator in Trading?
A margin calculator helps traders estimate the margin required to open a trade based on the lot size, product type, and leverage offered by the broker. Instead of working out the numbers manually, you simply enter the contract, quantity, and segment to get the exact margin required.
It helps you:
- Plan your capital before entering a trade
- Avoid order rejections due to insufficient margin
- Compare margin requirements across different segments
- Manage risk by understanding your upfront cost
How Is the Margin Requirement Calculated?
The margin requirement is calculated based on the total trade value and the leverage allowed in that segment. The basic formula is:
Margin Required = (Trade Value ÷ Leverage)
Where:
- Trade Value = Price × Quantity
- Leverage = Multiplier offered in that segment
Example:
If you buy 1 lot of a stock futures contract worth ₹5,00,000 and the broker offers 5x leverage,
Margin Required = 5,00,000 ÷ 5 = ₹1,00,000
A margin calculator performs this automatically and also factors in:
- SPAN margin
- Exposure margin
- Exchange-mandated requirements
Types of Margin
There are different types of margins in trading, especially in the F&O segment:
When Do You Need a Margin Calculator?
You need a margin calculator whenever you place trades in segments like equity intraday, futures, options writing, or currency trading. It helps you check the exact margin required for each order so you don’t face any surprises after executing the trade.
It is useful when you want to:
- Compare margin across different stocks or contracts
- Understand how leverage affects capital requirements
- Plan trades without blocking unnecessary funds
- Evaluate multiple trade setups before entering the market
How to Use the Bajaj Broking Margin Calculator?
To use the Bajaj Broking Margin Calculator,
- Select the exchange (NSE or BSE).
- Product segment (Futures or Options),
- Enter Scrip,
- Your action (Buy or Sell), and
- Quantity.
Once these inputs are added, the calculator instantly shows the span margin, exposure margin, total margin, and any margin benefit. This helps you clearly understand your margin obligation and plan your capital before placing the trade.